Weekly Market Updates: 05/20/19

Disney Claims Control of Hulu Ahead of Disney+ Streaming Rollout

Pitchbook data reveals that $9.5 billion was invested across 27 M&A deals in the U.S. last week, 6 fewer deals and $75 billion less capital after outsized M&A activity in the week prior. Two deals – targets Cray and Hulu - were in the billion-dollar range. The Walt-Disney Company acquired full control of Hulu for $5.8 billion, after what once was joint ownership by Disney, 21st Century Fox, Comcast, and Time-Warner.

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Five Firms Join U.S. Exchanges in Wake of Uber’s IPO

​According to data from the New York Stock Exchange, the NYSE and Nasdaq had five companies go public last week, raising $3.8 billion cumulatively. The largest of the IPOs was Avantor, a provider of chemicals for healthcare companies, which raised $2.9 billion.

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Retail Spending and Industrial Production Fell During April, While Housing Starts Climbed

Among economic news last week:
 

• American consumer retail sales fell in April, according to the Commerce Department. From March, total spending on retail and food services fell 0.2%, yet rose 3.1% from twelve months prior. Much of the monthly fall can be attributed to spending declines at vehicle and parts dealers, electronics and appliance stores, and home and garden retailers. Alternatively, spending at gas stations increased 1.8% in association with higher gas prices. Retail spending has followed a seesaw pattern in the first months of 2019, indicating consumer reluctance to spend freely, despite strong economic fundamentals.

• The Federal Reserve reports that U.S. industrial production fell half a percent in April, while rate changes for the prior months were revised downward. Of the three major industry groups, mining climbed 1.6% month over month while utilities and manufacturing fell 3.5% and 0.5%, respectively. As a percent of total capacity, manufacturing, at 75.7%, compared with a 63.7% low set in 2009. Major markets groups, such as business equipment, consumer goods, and construction materials, posted broad declines from March.

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• In April, U.S. housing starts totaled 1.24 million, representing a 5.7% increase from March but a 2.5% decrease from April 2018. Authorizations to build, measured via building permits, totaled 1.3 million in April, 0.6% above March’s revised level, yet 5.0% below the April 2018 level. Privately-owned housing completions were at a seasonally-adjusted 1.31 million, 5.5% above April 2018’s total. The data increased more than expected in the month and suggests that declining mortgage rates and drier Midwestern weather may have bolstered the market.